This invention relates generally to applying a rewards program promotion to payment transactions and, more particularly, to network-based methods and systems for enabling an account holder to select a rewards program promotion offered by a merchant, and applying promotion codes associated with the rewards program promotion to a payment transaction between the merchant and the account holder using a bankcard network.
Historically, the use of “charge” cards for consumer transaction payments was at most regional and based on relationships between local credit issuing banks and various local merchants. The payment card industry has since evolved with the issuing banks forming associations (e.g., MasterCard®) and involving third party transaction processing companies (e.g., “merchant acquirers”) to enable cardholders to widely use charge cards at any merchant's establishment, regardless of the merchant's banking relationship with the card issuer.
For example, FIG. 1 of the present application shows an exemplary multi-party payment card industry system for enabling payment-by-card transactions in which the merchants and issuer do not need to have a one-to-one special relationship. Yet, various scenarios exist in the payment-by-card industry today, where the card issuer has a special or customized relationship with a specific merchant, or group of merchants. These special or customized relationships may, for example, include private label programs, co-brand programs, proprietary card brands, rewards programs, and others. Rewards programs typically involve the award of rewards points to a consumer based upon certain incentivized actions taken by the consumer, such as the purchase of a certain value of goods or services from a particular merchant. Rewards points may be referred to by a particular rewards program as “rewards dollars,” “rewards miles,” or other descriptive name. The consumer then has the option of redeeming his or her accumulated rewards points according to rewards program rules to obtain better terms for a later transaction. The costs of providing such rewards program incentives to the cardholder may be borne solely by the issuer, jointly by the issuer and a merchant or third party, or solely by a merchant or third party, depending upon the type and sponsorship of the rewards program.
Special or customized issuer-merchant relationships such as rewards programs often require direct communications between the parties for transaction authorization and/or clearing (e.g., for financial transactions and rewards points redemptions). Further, the issuer may be required to maintain back office processes to manage the financial and rewards program aspects of these special or customized relationships. Alternatively, the issuers may exploit communications through merchant acquirers to facilitate indirect communications with the merchants.
Consideration is now being given to ways of improving implementations of the special or customized issuer-merchant relationships in the payment-by-card industry. In particular, attention is being directed to utilizing legacy general purpose bankcard infrastructure to support the transaction routing, merchant accounting, and financial settlement for these special or individualized relationships.
At least some known special or customized issuer-merchant relationships include rewards programs or other special offers (e.g., financing) that are applied to purchases made by account holders or customers using a payment card over a bankcard network. Typically, in these cases, the merchant is required to record any redemption of rewards program points by an account holder at the point of sale, apart from the standard payment card transaction. Furthermore, typically in these cases, merchant acquirers' systems must be modified to accommodate rewards program parameters, and/or the merchant must communicate directly with the issuer or cardholder, in order to enable reimbursement and tracking of rewards program usage. Consideration is now being given to ways to enable account holders to register in a rewards program being offered by a merchant and then apply the rewards program to a payment transaction between the merchant and the card holder using a payment card over a bankcard network.